Trade-Ideas: Bank Of America Corporation (BAC) Is Today's Momo Momentum Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Bank of America Corporation ( BAC) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Bank of America Corporation as such a stock due to the following factors:

  • BAC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $1.3 billion.
  • BAC has a PE ratio of 31.3.
  • BAC is currently in the upper 30% of its 1-year range.
  • BAC is in the upper 25% of its 20-day range.
  • BAC is in the upper 35% of its 5-day range.
  • BAC is currently trading above yesterday's high.
  • BAC has experienced a gap between today's open and yesterday's close of 0.6%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on BAC:

Bank of America Corporation, through its subsidiaries, provides various banking and financial products and services for individual consumers, small and middle market businesses, institutional investors, corporations, and governments in the United States and internationally. The stock currently has a dividend yield of 0.3%. BAC has a PE ratio of 31.3. Currently there are 7 analysts that rate Bank of America Corporation a buy, 2 analysts rate it a sell, and 14 rate it a hold.

The average volume for Bank of America Corporation has been 95.8 million shares per day over the past 30 days. Bank of America has a market cap of $151.4 billion and is part of the financial sector and banking industry. The stock has a beta of 2.23 and a short float of 1.2% with 1.48 days to cover. Shares are up 21.4% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Bank of America Corporation as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, solid stock price performance and increase in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 151.29% to $46,128.00 million when compared to the same quarter last year.
  • Compared to its price level of one year ago, BAC is up 54.50% to its most recent closing price of 14.23. Looking ahead, our view is that this company's fundamentals should not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization.
  • Since the same quarter one year prior, revenues slightly dropped by 1.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Although BAC's debt-to-equity ratio of 2.34 is very high, it is currently less than that of the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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